I highly doubt mortgages are assumable now, however, that doesn’t mean that if rates were 9%, they won’t come up with some financial instrument to have you continue to own the home and paying the mortgage directly, but also have the buyer pay some escrow to pay you back in a separate note, or some such thing. Stuff like this wouldn’t surprise me at all.
Also, for people who own homes in the clear, you can also be the lender directly and you can “sell” your home to a buyer and he will pay you back with a note directly. This was done in the early 80s…If your “buyer” defaulted, you get your old house back.
My gut feeling and as we’ve seen a ton already so far, all the bears are fighting a battle where the government is completely not on the side of housing prices collapsing (they actually have fallen quite a bit in many areas already). There is talk of further stimulus from the talking heads (Gross/Pimco) that the government has to do this or that. Unfortunately, our government is very much “bought” and look who is those positions?
That said, there are worst things than buying a place to live in if you can afford it.
One thing not discussed much now is that other than the Roth IRA, there also aren’t many tax free vehicles out there. (529s, Coverdell…)
That 500k tax free on home sale may not relevant in the next 5 years or 10 years, but over 30 years and after housing stabilizes where it moves up with inflation again, that could be a nice perk for folks to consider, especially if higher taxes are coming.
